Current State Mapping of the Supply Chain in Engineering Procurement - - PowerPoint PPT Presentation

Current State Mapping of the Supply Chain in Engineering Procurement Construction (EPC) Project: A Case Study

Moh Nur Sholeh, Shifa Fauziyah

4th International Conference on Rehabilitation and Maintenance in Civil Engineering (ICRMCE 2018)

Introduction

• For a long period of time, the poor performance and poor efficiency in

construction projects have been confusing the researchers and stakeholders.

• Supply Chain Management (SCM) that has been successfully applied in

manufacturing is introduced to construction projects to improve efficiency and reduce waste.

• Therefore, the construction project competition among companies has been

changed into the competition among supply chains

Introduction

• One of the biggest project in Indonesia

is Engineering Procurement (EPC) project at Banyu Urip, East Java.

• In the EPC projects, general contractors

including designer, material procurement, construction, and

• perators.
• General contractors faced bigger risks

than conventional projects, so SCM becomes an important aspect for the general contractor.

• This is because EPC projects

characteristically have long processes, large scales, and multi-supplier. So, how the general contractor can maintain supply chain performance.

• Thus, there is a need for research to

explore the current state mapping of EPC projects.

The Objective of Study

• The problem that usually occurs at EPC project is a type of material that

is unique and large as the pipe of oil refining.

• For example, the EPC project of this case study used imported material.
• The contractor should plan where to buy it, when to bring in, and how

good process of delivery is because they are the key success of the supply chain.

• Use Value Stream Mapping

(VSM) method to explain the procurement processes for easier understanding and problem identification.

• It will illustrated in the

procurement process behavior within a specific period from the total production time.

THE OBJECTIVE: To map the supply chain Engineering Procurement Construction (EPC) project

Methodology

Method : Data collection: Data Analysis: Interviews : The flow of EPC procurement Questioannaires :

• Production lead

time

• Processing time

+

Face to face

• Fill the questionnaire
• Collect the data

Qualitative analysis from interview Quantitative analysis with Value Stream Mapping (VSM) method

Case study: the procurement of pipe material

Results & Discussions

• Banyu Urip project consisted of 5 major contractual divisions of work to Engineer,

Procure and Construct (EPC) the facilities needed to produce the field.

• These divisions were called EPC-1 through EPC-5 → This study focused on

EPC-1.

EPC-1: Central Processing Facility EPC-2: Onshore Pipeline EPC-3 Offshore Pipeline, Mooring Tower and Support Structure EPC-4 Gagak Rimang floating storage and

• ffloading vessel

EPC-5 Infrastructure, Raw Water Basin and Flyover Road

Results & Discussions

• The EPC-1 contract was awarded to Indonesian-led consortium Tripatra-

Samsung, whose scope included the Central Processing Facility (CPF), which was built logistically central to Well pads A, B and C, where 45 wells were drilled to produce the crude oil and inject water and gas.

• Natural gas, produced along with the crude oil, is used for power generation

at the CPF.

• This is gathered with flow lines and processed by the separation equipment

to remove gas and water components from the crude before its delivery through the pipeline for storage and sale.

• At peak construction, over 17,000 people worked on Banyu Urip EPC-1

project simultaneously.

Results & Discussions

Supply chain of pipe supports in EPC Project

Pipe Modeling (3D Autocad & Ansys Program) Pipe Modeling Checking

Share/upload pipe modeling data on Material Tracking System (MTS)

Create Material Requisition Sheet (MRS) Approved MRS Create Purchase Order (PO) Purchasing

Receiving Material – Create Material Receiving Report

Checking Material

Approved Material – Create Material Issurance Slip

Owner Field Engineering Request Send Request Confirm the Specification Send to Purchasing automatically Vendor Send to Vendor Construction Phase Send back Material Damage / Non conformance Material Send 2 weeks 2 weeks 2 weeks 3 weeks 2 weeks 3 weeks 3 weeks 1 week 3 weeks Performed by Engineering Performed by Field Engineering

Current state value stream mapping of pipe material

Total time: 21 weeks

Discussions

• The procurement of pipe that needs 21 weeks to flow through the phase

completely is too long.

• The contractor should be able to accelerate the time again.

Use local vendors during the EPC project in the case study often takes the

• verseas vendor, especially

the pipes material. It is rather difficult but with a good cooperation of local vendors and good quality of materials, this concept can reduce the duration of procurement of pipes material. Involving suppliers early in the design and develop supplier alliance. With the large scale of the project and all is designed by contractor, it is necessary to involve other parties in the design phase. Suppliers will direct understanding of the project requirements early and be able to manage their

• wn supply chain better.

Improve communication and coordination between supply chain participants. Effective communication between different departments in-house is a common difficulty for engineering firms. Industry practitioners explained that 15% of engineering designs have some mistakes.

Conclusions

• This paper has illustrated some of the complexities presented in

construction supply chain by presenting the case of pipe supports used in EPC project.

• It also has demonstrated the current state mapping that is very

valuable to improve the supply chain performance in EPC projects.

• Based on a case study on pipe material, the procurement process

from upstream to downstream takes 21 weeks. This is a waste of time to look for solutions.

• There are some views of supply chain improvement that need to be

applied and certainly still need a lot of studies. Such views are (1) using the local vendors, (2) involving suppliers early and providing input into engineering design, and (3) making good communication between supply chain participants.

Thank You

Moh Nur Sholeh mohnursholeh@live.undip.ac.id